Review of Management Options for the Landing Obligation

Executive Summary

Key Findings

• Widespread support exists for innovative solutions to support the Scottish fleet in living with the landing obligation
• Improvements to quota trading and the strengthening of fishing rights were regarded as important tools
• A consensus found the option of pooling quota and creating a 'buffer zone' as a pragmatic approach
• Effective monitoring and enforcement is perceived as a necessity in fostering the required adjustments to behaviour such as compliance and improved selectivity

Summary of Findings

1. The remit of this report was to investigate possible management options that have the potential to contribute towards the implementation of the landing obligation in Scotland. It focuses upon management options for catch after it has been caught and landed on deck. Through a review of best international practices and a series of key expert and stakeholder interviews, this report identifies strong support for the use of innovative management mechanisms to aid the implementation of an effective and practical landing obligation.

Improving the tradability of quota

2. The report found evidence of widespread support for improvements to the mechanisms that permanently and temporarily transfer quota at a European level and within Scotland. The central tenet of this was a desire to facilitate an improvement in transparency and efficiency. A common perception given was that trading mechanisms in Europe and Scotland exhibit a high degree of information inefficiency and a lack of transparency. There was a broad agreement that these instances of market failure are likely to constrain access to quota and inflate leasing prices. A management option that received a high degree of support was for the creation of centralised information points and the adoption of the Danish model that uses public online trading platforms for international and national quota swaps. Support for improving quota trading in this manner was based upon the perception that such changes could create a downward pressure on quota price and scarcity. The ability to execute real-time trades and improve the ability to buy quota on the way back into harbour was perceived as a useful tool.

Allocating and managing additional quota

3. A consensus within the interviews was that the most appropriate way to allocate any additional quota occurring from the shift to catch quotas was on the basis of current FQA holdings. However, a significant degree of support was given to the option of managing this quota and/or ring-fencing a proportion of national quota holdings and managing this as a 'buffer zone'. Buffer zones are a tool to protect against the overfishing of national quota and could work to account for uncertainty and irregularities in the transition period while affording vessels some security against accidental catches. Support for this mechanism was contingent on effective management of any 'pooled' quota as it would be susceptible to the problems that affect open-access resources. The report outlines economic and social controls that operated in countries utilising a similar system and discusses the possibility of tying access to pooled quota to monitoring provisions.

4. While the pooling of quota was most often supported at a government level - in line with government's ability to effect net societal/welfare gain in which some individuals will lose out-, the option of POs pooling and managing quota in a similar fashion was also identified. This received mixed support from the industry, with a general argument that this should be a voluntary arrangement. Similar private agreements between fishermen, called Risk Pools, operate in Denmark and the US and are have been reported to have reduced transaction costs, improve access to quota for accidental bycatch and have been used in tandem with technology to reduce fishermen's risk of catching choke-species.

Monitoring

5. Catch quotas will be harder to monitor than landings quota. Concern was expressed for monitoring arrangements under the landing obligation as it is crucial for European Maximum Sustainable Yield targets and the fostering of compliance and improved selectivity in Scotland that Member States and the EC know exactly what is being caught. The attitude towards the use of Remote Electronic Monitoring ( REM) was divided: generally the industry questioned its effectiveness while all others identify it as the only effective method for monitoring the landing obligation. Anxiety over the impact of REM on the TR1 and TR2 fleets can be viewed as indicative of REM's potential effectiveness. The use of carrot-and-stick schemes designed at fleet/sector level was put forward as a solution. Options to foster a level-playing field at a European level were identified and supported, such as access to 100 per cent of national quota entitlements released with fleet use of REM.

Enforcement

6. A view held by most of the stakeholders and experts interviewed was that unless the landing obligation is perceived as being enforced from the get-go and illegal discarding carries a high financial cost, it is unlikely that the behaviour changes required (compliance and more selective fishing) will be generated. Support was indicated for the use of strong financial penalties for illegal discarding and illegal landings in order to create the correct economic incentives.